85bn Cedis Micro-Credit For Rural Poor

Monday, December 12, 2005

The government has channelled ?85 billion (approx US$9.4 million) through the rural banks for lending as micro-credit to the economically active but poor in the rural areas for them to improve the quality of their lives.The Vice- President, Alhaji Aliu Mahama, announced this at the national celebration of the United Nations International Year of Micro-credit in Accra yesterday.

Alhaji Mahama, however, emphasised that the funds, which had been disbursed since September 2003 under the Growth and Poverty Reduction Strategy (GPRS), were not handouts.

He said gone were the days when government loans were regarded as a form of compensation or rewards for political patronage.

The Vice-President said such attitudes were not only retrogressive, but constituted the fundamental cause of the failure of such programmes in the past.He, therefore, appealed to all beneficiaries of the scheme to live up to their repayment obligations.

The Vice-President also urged the credit administrators and institutions to undertake borrower sensitisation and training for all applicants as the precondition to the approval of the credit.

He said the government, on its part, would ensure that Ministries, Departments and Agencies continued to provide the necessary preparatory and back-up post finance services for the credit institutions.

Mr Eric Osei-Bonsu, President of the Association of Rural Banks, said apart from the government funds, some agencies such as the United Nations Development Programme (UNDP) gave an amount of ?5.5 billion to five rural banks for disbursement. While another ?1.7 billion was given to an NGO for lending to the vulnerable in its area of operations.

Mr Osei-Bonsu said a total of 19,110 farmers and women groups benefited from the disbursement of the amounts.He said the Association of Rural Banks was mindful of the dangers posed by HIV/AIDS on micro-finance, since it was affecting the economically active people who were their customers.

He said the association was, therefore, having consultations with the AIDS Commission to source funds to educate beneficiaries on the dangers AIDS posed to the sustainability of the micro-credit scheme.

Mr Daouda Toure, UNDP Resident Representative in Ghana, said the UN General Assembly, in 1998, proclaimed 2005 the Year of Micro-credit.

He said the objective was that by 2015, at least 50 per cent of all national households would have had access to quality financial services.

Mr Toure said the focus of this year?s celebration was to raise awareness about the importance of micro-credit in alleviating poverty.